Can NHL Profit From NFL, NBA Labor Unrest?

As TV-Rights Deal With NBC, Versus Set to Expire, League Could Net Big Payday From Desperate Sports Suitors

While the National Football League lockout continues and the National Basketball Association braces for its own July 1 shutdown, the National Hockey League begins its postseason tonight poised to take advantage of the labor unrest of its brothers.

By the time the Stanley Cup playoffs come to an end in June, the NHL is hoping to parlay its red-hot popularity into a new TV rights deal that could double the $75 million annual agreement it holds with cable's Versus and broadcast's NBC.

The NHL is experiencing a ratings resurgence, which could help it at the bargaining table. Credit: AP

ESPN, Fox and Turner, as well as the incumbents, are all in the running for the right to broadcast hockey games. That's quite a turnaround from six years ago. After the devastating NHL lockout that canceled the 2004-05 season -- the first time a professional sports league in the U.S. had to postpone an entire season -- ESPN dumped the league's TV contract and no other bidder came forward save for Versus, at the time known as the Outdoor Life Network.

OLN ponied up $30 million in rights fees, and NBC cut an advertising revenue-share deal with the NHL.

Now everybody wants in, and the timing might be especially prudent for ESPN, given that the sports giant broadcasts "Monday Night Football" for the NFL (with plenty of shoulder programming during the week) as well as live NBA games from October through June.

The NHL declined to comment on its TV-rights negotiations.

Last month, MillerCoors, which recently inked a seven-year exclusive sponsorship deal with the NHL estimated at $400 million, strongly hinted at its distributors' conference that ESPN and the NHL could be joining forces soon.

"The only major sport not firmly in the grip of [the] ESPN empire is hockey and the NHL TV contract is up for grabs beginning this year, so stay tuned," said Andy England, the brewer's chief marketing officer. He was joined on stage by John Skipper, ESPN's exec VP for content, who said this: "The most acute target for us is the young adult male and as we think about what leagues we want to have relationships [with] ... we are forever trying to push into those leagues that have appeal for young audiences. The NBA appeals to a young audience. Soccer [is] very important for us in the young audience. You have the NHL, the youngest audience for a major league. And I have no comment on our current discussion with the NHL other than to tell you it's my fervent desire to help you activate that sponsorship you have there."

Asked to elaborate, an ESPN spokesman told Ad Age: "We've said for the record that we are certainly interested if it makes good business sense."

Right now, it probably makes great business sense. The NHL has rebounded from the lockout with a series of marketing and advertising ventures that have increased sponsorship as well as popularity. It introduced the yearly "Winter Classic," a New Year's Day game played outdoors at historic venues such as Boston's Fenway Park and Chicago's Wrigley Field, and the 2009 edition drew the largest TV audience for a regular-season hockey game in 34 years. In February 2010, the sudden-death overtime gold-medal final in the Olympics between the U.S. and Canada -- with rosters on both countries brimming with NHL stars -- helped spur the 2010 Stanley Cup playoffs to the largest audience in the sport's history. Game 6 between the Chicago Blackhawks and Philadelphia Flyers was the most-watched NHL game in the U.S. in 36 years, and the same game was the most-watched all-U.S. final in Canadian Broadcast Corp. history.

Yet despite its high-profile suitors, many sports-marketing and sports-media experts believe the rights will remain with Versus and the new NBC/Comcast venture.

"I think the league and Versus have grown very comfortable together over the last six years," said one former network programmer turned consultant. "Versus has put together some nice programming around the games and I think while [the channel] was hard to find several years ago, it's become a destination now for hockey fans."

That said, "Money talks. If ESPN rolls out a huge offer, the NHL would have to consider a return to ESPN," said Ken McMillan, longtime hockey writer and TV sports media writer for the suburban New York Middletown Times-Herald Record. "I believe ESPN has better promotional platforms and better distribution, but assuming the labor issues are resolved, then ESPN will have 'Monday Night Football,' the NBA and a huge slate of college basketball over the winter months. Does the NHL even fit there anymore?"